Monday’s announcement by Pfizer and BioNTech that a vaccine found that was 90% effective in preventing the Covid-19 disease, shook the markets.
Consequently, equity markets, specifically the sectors that were most impacted by the pandemic like travel and tourism, rose the most. The news also pushed the US Dollar to rise in all forex pairs, especially in XAUUSD (Gold) that had a great decline of about $100 as global market risk took a relief from the new vaccine breakthrough.
The global crisis of the Covid-19 pandemic still rising as the US had record rise in cases, picking up exponentially this past week. Europe is also experiencing a second wave which in turn opened the door to lockdowns to help contain the virus.
On the US election front, while Joe Biden is on track to take the White House, Congress is looking to be more divided. The pick of the Senate will not be known until, at least January.
The Brexit weekend news were also worrying as Ireland’s Foreign Minister Simon Coveney said that the two sides are still apart on fishing rights. On Sunday, UK negotiator, David Frost, said that the UK will not change its position as it seeks a post-Brexit deal with the EU. The UK has a limited macroeconomic calendar this week, with nothing scheduled until Wednesday were the country will publish its October inflation data.
EUR/USD
Last week the pair was has fallen during most of the week, reaching down towards the 1.1750 level before bouncing to close above 1.1830. The pair is likely to see more volatility next week as we expect it will test the 1.1900 and keep on ranging down to the 1.1700 level due to lockdowns and Brexit uncertainty.
Traders are looking forward to the Euro’s flash consumer confidence figure to have the greatest impact. It’s likely to be a gloomy measure as EU member states lock down to contain the 2nd wave of the COVID-19 pandemic.
FORECAST: SHORT
Resistance: 1.1850, 1.1900, 1.1950
Support: 1.1800, 1.1750, 1.1700
USD/JPY
Last week the USD/JPY gave us a lot of volatility, with the USD gaining from the Covid-19 vaccine news. The pair closed below 104.60, testing the 104.75 support level. This week, the pair is looking to test the 105.50 resistance again but keep a range down to the 104.00 level.
On the Yen, It is a busier week on the economic calendar with the Q3 GDP and finalized industrial production numbers to be announced on Monday, ahead of October trade figures on Wednesday. At the end of the week, the October inflation figures will also be watched by traders.
FORECAST: NEUTRAL/RANGE
Resistance: 105.00, 105.50, 106.00
Support: 104.50, 104.00, 103.50
GBP/USD
The GBP/USD last week as expected was ranging between the 1.3125 support and testing the 1.3275 resistance, but even flirting with the 1.3300 psychological price.
This week, we expect again gloomy Covid-19 numbers and Brexit negotiators have just 3-days to come up with a deal ahead of Thursday’s EU Summit and news of a deal would carry a breakout from the Pound.
FORECAST: SHORT
Resistance: 1.3225, 1.3275, 1.3300
Support: 1.3175, 1.3125, 1.3075
GOLD (XAU/USD)
Last week’s Gold losses, against the dollar were made by positive Covid-19 news. We are neutral on the pair as negative news coming to the EUR economic figures but on the other side more breakthrough happening in the vaccine race.
FORECAST: NEUTRAL/RANGE
Resistance: 1925, 1950, 2000
Support: 1900, 1875, 1850
USD/CAD
The vaccine supported a rise in crude oil on Monday, and gave the Canadian dollar an compensation to the general market dollar flood, but fading petroleum prices in the latter part of the week returned the USD/CAD to a modest gain by Friday. West Texas Intermediate rose 10.8% to Wednesday, 7.35% on the week.
The pair is expected to rebound at about the 1.32 resistance line only to go down testing the 1.30 support line.
FORECAST: SHORT
Resistance: 1.3175, 1.3200, 1.3300
Support: 1.3100, 1.3000, 1.2925
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